Does building the new with the old make you mature? Or is it a state of mind?
When exactly is an industry “mature?”
More than a few industry observers and pundits describe the fabrication and assembly industry as mature. In my simplistic way, I see the implied message as our
industry ain’t what it used to be.
When the term “mature” is used to describe any industry, it almost always has a negative connotation that the best days are behind. When I think of mature industries I tend to think of products whose usefulness has been displaced by something new, such as desktop PCs being replaced by tablets. I think of mature industries as having shrinking margins because of overcapacity created when customers migrate to the newer product, leaving plants under capacity and margins squeezed until the last maker folds. I think of a mature industry as one that produces a specific product with a lifecycle that spans from infancy through adolescence to maturity and finally extinction.
Many products in our lifetime have followed such a cycle. Radios went from tubes to transistors to extinction, made obsolete by smartphones. Ditto for cash registers, which evolved from mechanical to electronic, then were phased out in favor of computers with keyboards that are also cash drawers. The function of each product was replaced by enhanced function from a new and ultimately disruptive product.
But what if you don’t have a product per se? How does maturity impact industries that are themselves conduits to create new products? When is an industry that sells capability and capacity “mature?”
It is no secret that many, if not most, of the printed circuit board fabrication facilities in North America and Europe are long in the tooth. Proud companies producing technology-driven product, often on old equipment or with a combination of equipment best described as a hodgepodge of cutting-edge and antique. And while the EMS industry may look newer and fresher, it too has more than its share of older equipment doing yeoman duty while delivering demanding current technology. Which begs the question: Is that the indicator an industry is mature?
Possibly, the definition of mature when it comes to an industry is just as elusive as when describing a person. Some people in their 80s have more life in them than others who are only in their 30s. The same can be said about business. Some companies defy their industry’s relative position by reinventing themselves, while other companies founder even while their industry is growing. Maybe the real question, then, is not when is an industry mature, but rather, how can you leverage your maturity to keep your business (or industry) young?
The technology-driven electronics industry has always been the innovative leader that has fostered with capability and flexible capacity other product-oriented industries from infancy through the end of their lifecycles. New capability enables industries to expand, while also opening opportunities to emerging, often disruptive products to evolve into their own industries. The hallmarks of innovation and flexible capacity have enabled our industry to thrive, expand, innovate and endure regardless of individual company size or geographic location.
Sometimes, however, we need to learn from our collective experience. Being mature also means learning from experience and applying those lessons. And the lessons learned during the maturation process are many and include the fact that we are in a still-growing industry; innovation is the ultimate differentiator between success and failure; commitment involves people and investment; and ultimately, long-term success will come from embracing new customers who seek new capabilities while making new products, rather than holding onto the status quo.
So is our industry mature? I believe an industry is mature only when enough of its constituents lull themselves into maturity. There will always be companies that prematurely, well, become mature. Those will be first to founder. Equally, some companies will demonstrate impressive resilience and far outlive competitors. The difference between those two types of organizations is the commitment to evolve and change.
It’s that commitment – or lack of it – that can make the difference between ongoing success and self-fulfilling prophecy. Too many believe the best years are behind us. I fear they are either the people who have given up – who no longer see the excitement in being on the cutting edge of the next great technology – or those only seeking a fast buck.
Our industry is fortunate. We are not tied to any one end-product. We supply all. We must stay focused on innovation and embrace the new, no matter how scary that may appear. Innovation requires creative, talented people. When we stop investing in and developing those people, we will find the future begins to dim. And regardless of where it is in its lifecycle, investments must be prudent and wise. Only with creative, talented people can such investments in equipment be
made to satisfy the right next-generation customer.
When does an industry become mature? When the collective industry allows it to be. Based on what I see going on worldwide, ours is anything but a mature industry! Companies that fall by the wayside will be replaced by new, larger, more innovative enterprises that may not be in the same neighborhood, but will continue to provide the capability and flexible capacity for the next great product.
is president and CEO of IMI (imipcb.com); firstname.lastname@example.org. His column appears monthly.